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March 10, 2008 December 12, 2011 Mounds View Business Toolbox Internal Document Page 8 of 10 Who can apply? In general, loans are restricted to commercial, industrial, or service oriented businesses located in or moving to Ramsey County. In addition, businesses must be registered to do business in the State of Minnesota and demonstrate a need for public financing. How does the program work? Loans are typically made for the purchase of capital equipment, land and building acquisition, and building rehabilitation or new construction. Application fees are low, and rates and terms are more flexible than the market. Loans of up to $250,000 are provided. To request an application, or to obtain more information, you can contact Denise Beigbeder at the Ramsey County Community and Economic Development office at 651-266-8005. 4) Bonds used for Development Per State law, cities can issue bonds. These debt instruments can be taxable or tax-exempt. Not all bonds are general obligation. Pure revenue bonds are also common, especially for development. Bonds can be used to pay project costs and for the first two or three years of interest payments. This reduces the need for short-term revenue. There are several types of bonds the City could consider for development projects: a) Revenue Bonds – These are used to finance industrial, commercial and medical facilities, multifamily rental housing, nursing homes and some nonprofit activities. b) Industrial Revenue Bonds – These allow cities to issue tax-exempt bonds to finance fixed assets. In the typical transaction, the city issues the bonds and becomes the legal owner of the asset (e.g. building). The City then leases back or sells the asset to the company. The firm’s repayment coincides with bond payback. c) Essential Function Bonds − Certain types of economic development are considered by the state to be “essential functions” of a city. Sometimes called “housing revenue bonds”, these bonds are not general obligation bonds backed by the full faith and credit of the City. Revenues generated by the project pay the bond and can be used for a variety of housing options (market and nonmarket rate). d) Common Bond Revenue Bonds − State and local governments may issue tax-exempt or taxable revenue bonds on behalf of private borrowers to provide lower interest rates on long-term financing. In general, manufacturing, medical facility, nonprofit or nursing home projects are eligible for tax-exempt revenue bonds and those issued for commercial projects are taxable. Bonds issued through the Common Bond Fund are investment-grade instruments with a rating based on the security provided by the fund. e) Bank Qualified Bank Direct Tax-Exempt Loans − These are cost- effective tax-exempt financing for capital projects for small manufacturing companies and nonprofit organizations.